1999 (4) TMI 305 - AT - Central Excise

Summary

Issues: Valuation of captively consumed molasses for excise duty assessment.

In this judgment by the Appellate Tribunal CEGAT, Mumbai, the issue revolved around the valuation of captively consumed molasses for excise duty assessment. The appellants, two manufacturing companies, had consumed molasses internally at a rate of Rs. 850/- per metric ton (PMT). The Assistant Collector, however, considered the purchase prices of molasses by another entity, M/s. Western Maharashtra Development Corporation (WMDC), ranging from Rs. 1000/- PMT to Rs. 1850/- PMT, and re-determined the assessable value, leading to a confirmation of differential duty in three judgments. The Assistant Commissioner similarly re-determined the value for another appellant based on WMDC's purchase prices, resulting in the confirmation of differential duty.

Regarding the appeals filed by the manufacturers before the Commissioner (Appeals) Pune, they claimed that the Maharashtra Government had fixed the price at Rs. 850/- PMT, although this price was not officially notified. The Commissioner, citing Central Excise Act, 1944 and Rule 6(b) of the Central Excise (Valuation) Rules, considered WMDC's purchase price of Rs. 1950/- PMT for comparison, based on a judgment by the Madhya Pradesh High Court. The Commissioner rejected the claimed price of Rs. 850/- PMT and upheld the re-determined values by the lower authorities.

The Tribunal, upon review, found that the valuation of captively consumed molasses should be based on comparable goods produced by other assesses, as per Rule 6(b)(i). It highlighted that the comparison should have been made with a manufacturer of molasses geographically close to the appellants, rather than a consumer like WMDC. The Tribunal concluded that the Commissioner had overlooked this requirement, leading to an incorrect application of Rule 6(b)(i). Consequently, all the impugned orders were set aside, and the proceedings were remitted back to the Jurisdictional Assistant Commissioner for a proper enquiry into the values commanded by nearby assesses for comparable molasses grades. The appellants were directed to provide necessary information for this purpose, and the appeals were allowed by way of remand.